Thanks - from a quick read of the same transcript I think that they are excited by using a software subscription model for the ClearAg service. My read was that the total consumption of an Ag. Science or Crop Protection company for this product (that they embed into the services they sell) is around $1 million p.a.. a piece. Two things excite ITI here. First is that this is 80% gross margin so most of it will fall straight through to the bottom line - i.e. the company is currently close to break even levels. Second is the amount of these contracts that are/can come into the pipeline. Looks like 5 miilion in 2017 and building.
My view is that the excitement here is also from the Relm move. This is really the Fundamental Investors guys. But this marks a recognition that pros have taken a very careful look at the intrinsic value here and are re-rating it. Fact is that ITI is a very good platform for several important tech initiatives (e.g. connect vehicles) and that at the price beats venture capital.
Disclosure - I bought in July & September 2015 ... so for me so far, so good.
Isn't the transportation systems division the play here? I am thinking that there is major growth here in its own right and that its also gets integrated into various products that support the evolving auto-pilot (self driving) product market? Potentially Relm is interested in this - as they have private wide area radio network expertise. Maybe they build a transceiver type product that goes into cars or car fleets and that uses this traffic data? Relm could also leverage the OEM vendor relationships in Iteris's Sensor business?
Can someone give me the concrete business model for ClearAg? Many here have provided estimates of potentially large accessible markets, but how do they actually make money? It looks at best like an app that can access some Weather data and a couple of sensor measurements (soil conditions and disease) - is there a lot of people around who would regularly pay a lot of money for this?
Opinions from Privet and Fundamental Investors folks also welcome ...